time to buy, page-52

Hi Surandy, BXB had its largest rise in 4yrs yesterday i think you just missunderstood what you read. In saying that one would think bxb will have to come back a bit today..............................heres a story i found....................GREAT minds think alike. Last year Mark Rowsthorn and Paul Little had clocked up 20 years as a team building Toll holdings from nothing to a major transport/logistics conglomerate. The acquisition binge they embarked upon has few parallels in corporate history.

Their biggest bite was Patrick Corp - the transport company built from the ground up by the legendary waterside union buster Chris Corrigan.

It was one of the dirtiest campaigns imaginable and while the Toll team was the victor, it was only achievable after Little agreed with the Australian Competition and Consumer Commission to break up the company into two separately owned companies with no ties.

Toll Holdings would be run by Paul Little. And a new company, Asciano - run by Mark Rowsthorn - would be hived off from it.

The competition regulator set out strict criteria for the separation. The companies could deal with each other only on an arm's length commercial basis - no ownership ties, no joint ventures, no shared board members. It was a deal that took many months.

So it's a fair bet the ACCC's chairman, Graeme Samuel, was less than impressed by stock exchange statements from the industrial service and logistics giant Brambles yesterday.

In two separate announcements, Brambles informed the market that hidden on its list of shareholders were companies owned by both Toll and the company that devolved from it, Asciano.

They had shown up on the Brambles share register during the past six weeks. Not surprisingly, Brambles had begun inquiring of both as to their intentions. Toll told Brambles it didn't have any intentions right now, but declined to say what future intentions it had.

Perhaps more interestingly, Toll told Brambles that Asciano and Toll were not working together.

It's fair to say that when the break-up into two companies was proposed - to satisfy ACCC concerns - there were plenty of sceptics that saw this as window dressing - and it's probably also fair to assume that Samuel was one of them.

This is reflected in the amount of time it took the regulator to ultimately agree to the deal and let the parties retain all the assets acquired in the Patrick takeover.

Henceforth, Little and Rowsthorn will need to tread very carefully. They will not be able to breach any ACCC undertakings or any part of the Corporations Law that deals with being associates.

Until yesterday, Brambles had been marked down on the back of some disappointing sales numbers from its CHEP pallet operations in Europe. It has also lost its appeal to private equity players and the general softness in equity markets. This made it vulnerable to a trade buyer.It would be reckless to suggest Rowsthorn and Little are working together in the face of Toll's denial. But the circumstantial evidence to the contrary is overwhelming.

Theory A is that one is a stalking horse for the other. Theory B is that Toll and Asciano will bring in a third financing party to take out Brambles and split the spoils.

Those with a more generous interpretation are going with two further theories: C Little has long known that Rowsthorn has been interested in Brambles and is dabbling in the stock for a quick turnaround profit when Asciano pounces; or D, Toll could act as a spoiler when Asciano moves.

Given Little has no history of making money from share trading, C and D are somewhat implausible.

Theory E is that great minds really do think alike and Brambles could fit well with either potential buyer, and so the fact both are buying is a nothing more than coincidence. I would certainly be buying Brambles before I would be buying this theory.

But for Brambles investors, it doesn't really matter which theory is chosen. The company is now in play and if a bidder emerges, it is probably going to have to place $15 a share on the table to get a look in. If you subscribe to the view that the worst of the market jitters are over, you can see why Toll and Asciano were attempting to sneak around the Brambles register to pick up some cheap stock.

For its part, Brambles has a tradition of paranoia about being taken over. It regularly sweeps the minefield for potential aggressors and any aberrations are picked up and investigated.

This sensitivity comes from being on GE's radar screen for so many years. Back in those days, its share price was enough defence - but in recent years that defence has evaporated
cheers